If you’re looking for a payday loan in Michigan, here’s what you need to know.
Payday loans can be an option if you need cash to pay for an emergency expense, but you’ll want to make sure you’re getting the best deal. Read our guide on payday loans in Michigan before you take one out to save yourself time and money.
How does payday lending in Michigan work?
Section 487.2121 et seq. of the Michigan Compiled Laws, referred to as the Deferred Presentment Service Transactions Act (Act 244 of 2005), governs the functioning of payday lenders.
This list simplifies how much you can borrow and what it will cost.
- Maximum loan: $600
- Loan term: 31 days or less
- Financing fee: Varies by loan amount
- APR: A 14-day $100 loan has an APR of 390%
- Collection fees: Lenders are allowed one $25 non-sufficient funds (NSF) fee
A breakdown of financing fees:
- First $100: 15%
- Second $100: 14%
- Third $100: 13%
- Fourth $100: 12%
- Fifth and sixth $100: 11%
You may only have two payday loans at once, but they must be from different lenders. Rolling over/refinancing your loan isn’t permitted unless the lender doesn’t charge a fee.
If you find any irregularities in your loan or wish to file a complaint, contact the Department of Insurance and Financial Services.
Possible changes to current lawsBe on the lookout for more information regarding the bills SB 430, SB 431 and SB 432. These would increase the amount consumers can borrow, which further increases the high-cost of payday loans. There are many consumer groups and activists against the bills, but even if they pass, remember that you should only borrow as much as you can afford.
Payday loans offered in Michigan
Check the websites of any providers you’re interested in to confirm they operate Michigan.
Applying for a payday loan in Michigan
Lenders require you to be at least 18 years old, a citizen or permanent resident of the US and that you have a regular source of income. If you meet these basic requirements, you’ll need to supply your Social Security number, date of birth, information about your employment, contact details and a valid form of ID to fully complete your application.
If you’re applying online, you’ll also need to give the lender access to your checking account. This is so your loan can be deposited directly and your payments debited when your loan is due. Be careful, though–if you don’t have enough to pay back your loan, you can be charged overdraft fees by the bank and a NSF fee by the lender.
Before committing to a loan, think about the alternatives
A payday loan can be a good option when you’re facing a financial crisis like an unexpected bill or a shortfall in your budget, but they aren’t long-term solutions to financial problems. When you’re looking into payday loans, spend some time contacting local programs like Project FRESH or the Michican Medicare/Medicade Assitance Program (MMAP). These can help take care of other bills while you work on paying down your debt.
When you’re looking into paday loans, be sure to consider all the costs, how much interest you’ll be charged and the other options available to you before making a decision. Payday loans can be expensive, but when you’re in a rough patch, they can be used to get by and help pay down other debts.